Sunday, January 22, 2012

If you find gossip entertaining, then the Las Vegas motorcycle auction weekend of 2012 was a better show than Cirque du Soleil or Celine Dion; the forced entry of RM subsidiary Auctions America into the January calendar had tongues wagging, tempers flared, and 'flippers' happy. 2011 marked the first major change in what had been the sole province of MidAmerica Auctions, whose annual 500-machine marketplace was at the time the biggest single vintage bike auction in the world, for over 20 years. The entry of Bonhams into the weekend event last January hinted stormy weather, although only minor flurries materialized, as Bonhams discreetly tucked their 1-day auction into a Thursday daytime slot, allowing buyers taxi time for the South Point Casino, and Ron Christensen's MidAmerica dinner auction.

The storm arrived this year with the decision of RM to land its schedule squarely atop MidAmerica's dates; a Thursday evening dinner sale with ~75 bikes, followed by two full days of noisily auctioning several hundred further machines. 'V' is for Vegas, and also Vendetta; rumors circulated all year of failed buyout negotiations between RM and MidAmerica, including dramatic dialogue ('if I can't buy you I'll crush you!'), wildly fluctuating 'my buddy said' estimates of buyout sums offered, whispers of Herculean pressures on Auctions America's Glenn Bator to 'perform' this year, and RM's willingness to 'spend' (ie, lose) hundreds of thousands of dollars to squash MidAmerica, and establish RM as the King of vintage motorcycle sales across the globe. Bwahaha....

2011 saw some big shifts in the motorcycle auction world, with traditionally automotive houses RM and Mecum announcing moto-intentions by adding two-wheelers to their car sales, with mixed success; Mecum Auctions had a spectacular meltdown during Pebble Beach week in August 2011, selling reputedly 'bought-in' collections at no reserve, then watching helplessly as bidders failed to materialize, and the very same fellows who'd pocketed fat Mecum checks, were seen re-purchasing choice bikes from their former collections, at significant discount. Ouch. RM entered the fray in London quietly, adding 25 bikes from a single Italian collection to their flashy Battersea Park sale last October, all of which sold.

Bikes at the RM auction in London's Battersea Park, Oct. 2011

The notion that RM are bedazzling 'Top Dog' collars for their team isn't outlandish, as that's the position they hold in the collector automobile market worldwide...but it isn't MidAmerica they'll have to displace at the top of the dogpile - it's Bonhams, who currently sell about 1300 old bikes annually in the US, England, Europe, and Australia. MidAmerica auctions, a true mom-and-pop business out of Wisconsin, has Las Vegas and another small event in St.Paul as its traditional core of vintage bike sales (with around 700 bikes annually), so the RM invasion of its turf was a cause for some worry to the Midwesterners. To put it in perspective, RM's top four cars from their London sale would eclipse MidAmerica's entire yearly gross, and RM's annual car sales in toto dwarf the entire vintage motorcycle auction world. Hence the 'David and Goliath' stories during Las Vegas, and a few indignant Vegas regulars' refusal to even set foot in cavernous halls of the Rio.

As it turned out over the course of the weekend, enough buyers appeared at every auction, opened their wallets wide, and spent around $10.5 Million combined at all three auction houses. This is over 3 times the cash flow back in 2010, when MidAmerica was the sole auction house mid-Winter in the Nevada desert. Clearly, there ARE enough 'asses for (motorcycle) seats'...to whom I must include myself, as I bought a bike too!

Bonhams' CEO Malcolm Barber conducted most of the sale at the Imperial Palace

Bonhams[note: principal sponsor of The Vintagent] started the ball rolling on Thursday at the no-frills Imperial Palace hotel, in the back of their Auto Collections museum. When you eventually found the auction hall, it was clear Bonhams had consigned exactly the kind of 'rusty junk' which drives collectors cash-crazy; the time capsule DuPont collection of bikes, and more importantly, bike parts, with super-rare Indian, Harley, Ace, and Henderson bits, sold for enormous money, and bouyed the Bonhams bottom line significantly. Everything oxidized sold for several times its estimate, leading one wag to joke, 'are those estimates so low to make a good press release later?' The hall was full all day long, and a parade of fantastic original-paint bikes sold for very solid prices. No records set, but no setbacks either, especially when two Vincent Black Shadows (one 3k-mile 'barn find' Series B, one immaculate Series D), sold for $122,500 each. Bonhams had an overall excellent result, totaling around $2M in a single day, surely the most profitable of all three auctions of the weekend, as a proportion of bikes/total sales, or even total sales/time spent selling!

Bonhams even finished a few minutes early, and bidders scurried away to make the MidAmerica dinner auction (which was well attended) or the Auctions America steak dinner (which was not so well attended, and RM's paid-for filets were reportedly being given away to anyone within earshot). Rumors began circulating immediately that it was bargain time at the Rio Hotel; as Auctions America has a 'no reserve' policy for bikes estimated under $20,000, buyers were happy to snap up inexpensive classics, and more than one acquaintance was heard 'calling home' to increase their allowance...some buyers loaded up with nine, ten, or fifteen machines to bring home, often to re-sell from their business at a profit. The spirit of Arbitrage is alive and well in Las Vegas; motorcycle gambling is fun for the whole family!

The 1915 Iver Johnson 'never started' twin which sold for $299,600

There were fewer outright bargains at MidAmerica, as even many low-price bikes held reserves, but at the end of the weekend, they could boast the most expensive sale ($299,600 for a 1915 Iver Johnson in -mostly- original paint), and very few machines remained in their 'second chance corral'; Ron Christensen looked a satisfied man on Saturday afternoon, and whatever fears of RM stealing their thunder proved unfounded; if anything, it seemed many more motorcyclist attended this year's Las Vegas sales than ever before, which can only be a good thing.

The Auctions America podium, with a couple of nice Harleys ready for the hammer...

It was more difficult to gauge the mood at RM/Auctions America by the end of Saturday; with nearly 700 bikes on sale, it was clear they'd aggressively sourced bikes to create the biggest collection of vintage motorcycles ever offered for auction at a single event. It was their first year, they'd had plenty of buyers in the halls, and over $4M changed hands. Buyers were certainly happy with their bargains, but one seller commented that Auctions America had 'set back auction prices 10 years.' Whether the overall result was profitable is a question I can't answer, but with a serious cash reserve from high-dollar car sales, RM can afford to spend money and establish their name in the global vintage motorcycle calendar.

As a final note; Auctions America hosted a panel discussion on 'the state of motorcycle collecting', which I'll summarize in another post. The success of this panel (with host Dave Despain of Speed TV, and four moto-luminaries) made me wonder if Las Vegas could become the world's first vintage motorcycle Convention...enough bike collectors, writers, investors, and enthusiasts are milling around the horror which is Sin City over four days, that a few seminars, films, and demonstrations would be a welcome and well-attended diversion. Just a thought...

13 comments:

Great report Paul. After bidding at all 3 sites with my collector friends I agree with most of your observations. It was the most hectic and hard working auction year ever for me. Hauling, unloading & loading in 2 locatons. Taking care of my somewhat limited mobility collector buddy (handicap placards are a godsend) Driving 1300 miles, all in the space of 72hours,consumed an enormous amount of energy. Recovery took a couple of days for this older rocker.

My thoughts on the overall effect of 3 auction houses in the area at essentially the same time and place are still percolating in my mind. It's definetely in the nature of American Capitalism to spawn competition. All the big collector car auction houses compete with each other in Monterey during Pebble Beach abd Historic Racing at Laguna Seca so why not compete for bike dollars in Vegas? I do prefer, however, that it all be above board and I'm just not sure of the integrity of some of these companies? I do believe Bonham's to be above reproach with Mid America being fairly legit. But RM has a long ways to go before I'm convinced.

Hi Jer,the 3 auction companies do things differently from each other, and everybody has an opinion about those differences, which I'm sure you heard plenty about during the week.

It IS interesting to watch how RM's 'car auction' practices are perceived by the much smaller and less well-heeled bike community. I've attended a couple of their car auctions and even one of their private pre-auction parties, which was lavish, especially in comparison to any bike event, barring the Legends or the Quail.

There's a little cultural friction showing up, and people will voice their opinions while, like you, attending all 3 auctions! Which is the ultimate take-away from this weekend; it didn't matter what your opinion was - if the price was right, your bidding paddle found its way skyward.

Hello Paul. Thank you for sharing for your account of the situation. Your last sentence was the one that excited me, and reminded me of the things that you, Kim, Jared and I spoke about for the stillborn 4th Legends of the Motorcycle show.

An actual Vintage Motorcycles Convention! It could be complete with tutorial speeches, published papers, slideshows, vendor booths, a road run, bike show and just maybe even a little old auction.

But it goes unspoken that there is one GIGANTIC aspect of motorcycling that is missing from the current Las Vegas spectacle: The actual RIDING of motorbikes as their makers intended.

Very nice and accurate write up of the weekend, Paul. It certainly was a buyers market at RM Thursday night and they took a beating, but I guess it was all an attempt for power. It'll be interesting to see what happens next year. I for one, will be prepared to rent a truck to trek bikes back east if anything comes close to the "giveaways" that were happening at RM, though I think everyone else will have the same idea and prices will not be so low in the future. It certainly was a fun and very interesting weekend and I am eagerly awaiting the delivery of my 56 T20, which Ironically came from the du Pont estate located just 15 minutes from my hone in Pennsylvania. Sigh.

Getting these auctions televised with expert commentary would go a long way toward improving the caliber of motorcycle programming now available in the U.S. So would a show from Wheels Through Time for that matter. I can't handle Cafe Racer's short-attention-span theater. How about something like the Brit who restored a 45 on DIY or some such.

I've got to wonder , when it comes to the ' discounted ' M/C's at the auctions reported here , as well as the significant bikes that did not meet their reserve : whether or not the M/C Collectors market may be drying up a bit due to the economy as well as M/C's not yet being perceived as a ' Safe ' investment in the midst of financially challenging times .

I guess it'll take another round or two of auctions to get a clearer picture , but I'm kind of leaning towards the ' Drying Up ' scenario myself . I certainly hope not for some of my older VOC mates sake , but thats my ever so humble opinion

Hi Paul,I was just reading your posts on the Jan. auctions.Any feel for where our hobby is going?Is money looking for a place to hide with speculation down the road?Can there be that many buyers for old motorcycles?As you’ve seen in your travels there are A LOT of old bikes out there.It startles me when I see bikes I’ve owned in the past go for multiple 10s or 100s of thousands of dollars.We all know deep down they really aren’t worth it.Are old bikes strapping on the skis getting ready to jump the shark?Predict the bubble,my friend,I’ll thin the collection.Sam

Hi Sam,We've had two bubbles already; in 1989 and 2008, both times when Vincent Shadows went over $100k regularly. I don't think we're in a bubble at the moment, but the 'car guys' could push the rarest bikes over the top. The vast majority of bikes will remain affordable for some time...there are simply too many of them to get very expensive. If you want a Goldie or Bonnie or Shadow or Manx, you're always going to have to pay more, but if you want a G12 or MSS or Sporty, you'll find one cheap...

Sadly, with the RM Auction, it wasn't RM taking the hit, it was the folks who consigned their motorcycles for RM to sell. They either bought them back@ approx. 30%, or let them go@ a loss! It wasn't pretty!- Paul, great story on the auctions-greatly appreciated---BPK!!

Am afraid it all has a smell of 1999 NASDAQ to me fellas... early hint of it was recent Barrett-Jackson...when you're observing an event and find yourself saying "wow, they're really pulling all of the stops"....there's a reason behind that saying...

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